It’s prediction time again. What will real estate prices in the Greater Vancouver market do in 2012?
Most outlooks are for stagnation or price drops. Prices have been falling since June, even though we’re still higher than last December.
Will prices continue to fall? Or will local real estate compete well against other assets and gain ground?
Tsur Somerville, from the Sauder School of Business, sees flat or little price growth in 2012.
Robyn Adamache, from the Vancouver CMHC office, was quoted as saying “We’re expecting much less price growth this year compared to 2011…We’re calling for about a two-to-three-per-cent increase in price growth in 2012, close to the rate of inflation.”
Personally? It’s election year in the US. There’s an old rule of thumb that says interest rates don’t go up when the president is seeking re-election. Add in the dismal state of the US economy. Rates will stay low. Low rates means you can hold real estate. Highly leveraged people cannot sell at a loss unless they inject cash. At low rates more of those people can pay mortgages. In short, I can’t see what will force sales at lower and lower prices…unless long term holders entering their golden years decide it’s time to cash out.
I expect the Canadian economy to remain fairly stable, and to continue to compare well globally. I’m calling for 0%-5% increases in prices December 31, 2011 to December 31, 2012.
What say you?